Anavex Life Sciences Corp. (AVXL) Earnings Call Transcript & Summary

Thank you, and good morning, everyone. Welcome to the Anavex Life Sciences ANAVEX-3-71 Phase I top line data conference call. My name is Clint Tomlinson, and I will be your host for today's call. [Operator Instructions] During this session, if you would like to speak and ask a question, please use the raise your hand button on the bottom. However, if you prefer to leave a question in writing, please use the Q&A button on the bottom right. Please note that this conference is being recorded. The call will be available for replay on Anavex's website at www.anavex.com. With us today is Dr. Christopher Missling, President and Chief Executive Officer; and Dr. Ed Hammond, Chief Medical Officer. Before we begin, please note that during the conference call, the company will make some projections and forward-looking statements. These statements are only predictions based on current information and expectations and involve a number of risks and uncertainties. We encourage you to review the company's filings with the SEC. This includes, without limitation, the company's Forms 10-K and 10-Q which identify the specific factors that may cause actual results or events to differ materially from those described in these forward-looking statements. These factors may include, without limitation, risks inherent in the development and/or commercialization of potential products, uncertainty in the results of clinical trials or regulatory approvals, need and ability to obtain future capital and maintenance of intellectual property rights. And with that, I'd like to turn the call over to Dr. Missling.

Thank you, Clint. We appreciate everyone joining us on today's conference call to review our reported ANAVEX 3-71 Phase I top line data results. In summary, we are very pleased to report the positive results from Phase I clinical trial of ANAVEX 3-71. The study reached primary and secondary endpoints of safety, respectively. ANAVEX 3-71 was well tolerated as oral administration in all dose cohorts. No serious adverse events or dose-limiting toxicities were observed. The data provides early clinical proof of ANAVEX 3-71 having the same pharmacokinetics in both gender and no food effect. ANAVEX 3-71 is an oral small molecule agonist of both sigma-1 and cholinergic receptor muscarinic, M1, in development for the treatment of neurodegenerative diseases including frontotemporal dementia, FTD, for which ANAVEX 3-71 has been granted Orphan Drug Designation by the FDA. The study was a double-blind, randomized placebo-controlled Phase I trial to evaluate safety and tolerability and pharmacokinetics of oral escalating doses of ANAVEX 3-71, including effect of food and gender in healthy volunteers. ANAVEX 3-71 was well tolerated in cohorts receiving ANAVEX 3-71 in single doses ranging from 5-milligram to 200-milligram daily with no serious adverse events and no significant laboratory abnormalities in any subject. In the study, ANAVEX 3-71 exhibited linear pharmacokinetics. Its pharmacokinetics was also dosed proportional for doses up to 160 milligrams. Gender had no effect on the PK of the drug and food had no effect on the bioavailability of ANAVEX 3-71. The study also met the secondary objective of characterizing the effect of ANAVEX 3-71 on electrocardiogram, ECG parameters. There were no clinically significant ECG parameters throughout the study. Participant QTcF measures were normal across all those groups with no difference between ANAVEX 3-71 and placebo. We are very pleased with the Phase I trial results for ANAVEX 3-71 and are eager to advance ANAVEX 3-71 into a Phase II. We believe this very encouraging results provide a proof-of-concept of our sigma-1 product platform and helps validate our Anavex approach to CNS target selection in drug discovery and increases Anavex's confidence in the potential of our precision medicine technology to address serious neurodegenerative diseases. Based on these results as well as ANAVEX 3-71 preclinical profile, we intend to advance ANAVEX 3-71 into a biomarker-driven clinical development dementia program for the treatment of FTD, schizophrenias, and Alzheimer's disease, evaluating longitudinal effect of treatment with ANAVEX 3-71 initiating in 2022. We believe that the results of this study could serve as the basis for advancing into respective registration studies in the U.S. We are very excited to have reached this milestone and expect to continue our momentum, including the release of the upcoming AVATAR ANAVEX 2-73 clinical trial in Rett syndrome as well as the Phase II/III EXCELLENCE ANAVEX 2-73 clinical trial in Pediatric Rett syndrome and the Phase IIb/III study of ANAVEX 2-73 in Alzheimer's disease. As we look ahead, we will continue to focus on driving meaningful growth across our broad sigma-1 platform to deliver transformational treatments for patients with both degenerative and developmental neurological disorders around the world. We look forward to providing further updates and advancements continue. I would now like to open the call for questions. Clint, please go ahead.

Thank you, Christopher. We'll now begin the question-and-answer session. [Operator Instructions]. The first question comes from Charles Duncan at Cantor Fitzgerald.

Thanks, Christopher, for hosting the call. Had a couple of quick questions on 3-71 and then one on 2-73. Regarding the dosing that you mentioned, you provided the range. Appreciate that. Were these once-a-day doses or multiple times a day doses? And then secondarily, regarding metabolism, any sense of how the drug is metabolized and whether or not we could anticipate any drug-drug interactions?

I'd like to introduce to our Chief Medical Officer, Ed Hammond. Ed, if you like to take those questions, please.

Yes. Definitely happy to. Thank you, Christopher. Yes, so these patients were dosed ranging from 5-milligram all the way to 200 milligram, and these were daily doses, daily doses with increasing cohorts amongst patients.

Yes, daily doses but multiple times a day. I mean, is this a QD or BID agent?

Single oral daily doses, single oral daily doses. So we had 3 cohorts of patients, first cohort of patients ranging from 5 milligrams to 50 milligram and then from 50 -- 5 milligram to 200 milligram have been the second cohort. And they all received single oral doses of the medication.

Okay. And then any thoughts on metabolism?

Do you mean the question is how it metabolizes?

Yes. How is it metabolized? And could we anticipate -- did you evaluate potential for drug-drug interactions?

So yes, that work is still ongoing. It's very early at this stage is the top line results, but the metabolism work is still ongoing. We're also working on concentration-effect relationship for 3-71 and also for the M8 metabolite. And that is ongoing according to the ICH E14 guidelines. So we'll be able to share more on that later on.

Okay. And then kind of moving to 2-73, I wanted to ask about clinical timing and gating. But before I do, I guess I'm wondering if you could characterize 3-71 relative to 2-73 in terms of pharmacology or dosing parameters? How would you compare and contrast the 2 candidates?

Yes. Let me take that, Charles. So both compounds are completely different entities. And it's hard really to compare them because we have much more data of ANAVEX 2-73 than information about 3-71. But what we can say is that the broad efficacy of 2-73 is definitely unmatched at this point,and ANAVEX 3-71 has to basically now show in the clinic its respective features which we're planning to do as we stated. And we try to give ANAVEX 3-71 a little bit its own path by the focus on FTD, Frontotemporal Dementia, where we have orphan drug designation, but also schizophrenia because it has M1 agonist effect, which ANAVEX 2-73 does not have. It's more a muscarinic effect on M2 antagonistic, which is differentiated. And so because of that, we think about ANAVEX 3-71 is going in its own direction. The overlap is clearly in Alzheimer, where we have with ANAVEX 3-71 excellent triple transgenic preclinical data. And with ANAVEX 2-73, we had very good TG2576 preclinical data. So there are different animal models, but both were very strong. And ANAVEX 2-73, as you know, went into a Phase IIa Alzheimer disease successfully now in a pivotal study in Alzheimer disease. So it's hard to really compare it yet at this point in time. However, when we look at the safety Phase I data between the 2 compounds, ANAVEX 3-71 looks from the profile and extremely well tolerated. So we had a much broader therapeutic dose range. We dosed in ANAVEX 2-73 up to 60 milligrams in the Phase I and in ANAVEX 3-71, we dose up to 200 milligrams. So it's a broader range with ANAVEX 3-71. I hope it helps.

It does help. That's intriguing with regard to the M1a agonist activity of 3-71 versus 2-73. Regarding 2-73, in terms of AVATAR and EXCELLENCE timing, can you provide a little bit more color on the gating factors to being able to really press release data from those 2 studies?

So we just said around year-end and around means around it. And we basically now delivered the ANAVEX 3-71 Phase I data also within this time frame, and you should expect ANAVEX 2-73 AVATAR study very soon as well. And the ANAVEX excellent study, we stated in the first half of this year, and we expect this probably to be towards the end of the first half of this year because we want to make sure that the study gets properly completed. And what we also noticed that just always little things like flights have been delayed, as you have noticed recently, all these impacts also, communication and sampling, shipments and so forth. So there was like the features which cannot be anticipated in a perfect scenario of time planning. But we believe everything is on track and especially on AVATAR is coming around soon.

So I assume in the first quarter?

Yes, absolutely. We're talking about [indiscernible].

The next question comes from Soumit Roy at Jones Trading.

This is Danya Ben-Hail for Soumit Roy and congratulations on the data. I like to ask about next step for 3-71. So you mentioned initiation of the trial somewhere in 2022. Can you elaborate?

Yes. So we like to start probably as soon as possible. We're very excited about the profile of the drug and the clinical profile, the clinical profile now. And the preclinical profile is very exciting because we have, as I mentioned, triple transgenic animal model in Alzheimer's disease. But also, we have the feature of the drug, which seems to be able from literature to be able very strong, have an impact in schizophrenia. And last but not least, with orphan drug emission in FTD, Frontotemporal Dementia. So what we are planning is a quasi-basket trial for -- where we put all these 3 indications in 1 study and we see how the drug effect is working on the longitudinal side and compared to placebo. So will be placebo-controlled study where we look at all these indications at the same time with the respective placebo arm. So that's why it's a quasi-basket trial and we like to initiate it probably as soon as possible. We will provide an update once we are able to make this update this year.

Great. Do you have -- do you know if it's open for all patients of the 3 indications? Or are you going to have eligibility -- yes?

You're right. So all of these things will be elaborated in a very detailed protocol, but it will be likely a protocol, which includes separately patients with Alzheimer's disease, with Alzheimer pathology, patients with schizophrenias and patients with FTD. And among them, we will make sure we capture what is now considered state-of-the-art patients who are declining, patients which are homogeneous in the pathology. And that's why we stated it's going to be a biomarker-driven, both inclusion criteria as well as in the outcome study. So we will make sure -- we would like to make sure we have a cohort or respective cohorts of the indication, which are homogeneous enough to also derive intelligence from the study, which will then lead to respective positive outcome to respective pivotal studies in the respective indications. So if the FTD study is successful for Phase II, we will then advance into a pivotal study of FTD or expanding the Phase II into a pivotal study, which is because it's a rare disease might be a possibility and the same will happen with the schizophrenia cohort and with the Alzheimer's study as well -- Alzheimer's cohort as well.

And the last question about the biomarkers, is it going to be in sigma-1 as well as other ones to differentiate it from 3-71?

Right. It's a excellent question. We should remind ourselves that what ANAVEX 3-71 has in common with ANAVEX 2-73 is the sigma-1 receptor activation. It's an agonist of the sigma-1. So this is our really driving force of the motivation of advancing drug development. What we noticed, though, when you look in close proximity of the features of the drug, there's also an affinity to some muscarinic receptors for both drugs. And the difference between ANAVEX 3-71 and ANAVEX 2-73 is that ANAVEX 3-71 has an affinity to the M1 agonist, so the M1 receptor is an agonist, an active agonist. So it's basically a combination of sigma-1 activation agonistic as well as in M1 agonistic activation. So that's the feature of ANAVEX 3-71 and both targets are known to be respective by itself, strong CNS beneficial activators. So M1 activators are known to be predominantly useful in schizophrenia, that's existing data of other drugs in trial for schizophrenia with just M1 agonistic features. So we believe the sigma-1 presence will give additional synergy to that effect. Now when you look at ANAVEX 2-73, on the other hand, there is a very strong sigma-1 activity as well as muscarinic activity, but it's not as strong on the M1, it's stronger than the M2 antagonistic and M2 antagonist means that removes the acetylcholine, which has been pushed out. So it makes it clear again for new receiving stimulation and that's an advantage for recognition. And that's what we believe the synergy could be of ANAVEX 2-73 in its effect in dementia and in these other disorders like Parkinson as well as Rett syndrome we have seen so far.

Okay. Just do you know when we should expect the next update?

Very soon, as I stated, be -- stay tuned, we will announce based on the additional data.

The next question comes from Yun Zhong of BTIG.

I just want to follow up the question about the comparison between 3-71 and 2-73. Have you ever measured the affinity on -- what's the magnitude of affinity differs between 2-73 and 3-71 for -- to sigma-1?

Yes. Excellent question. We do. We have very clear knowledge about that. That's why we moved both drugs into the clinic. So ANAVEX 2-73 has slightly lower affinity to the sigma-1 in vitro and ANAVEX 3-71 has a higher affinity to the sigma-1 receptor in vitro. So what we don't know yet if that also translate into biological activity. Does that make sense? So you can have in an artificial system, a high affinity to receptor. But in the biological system, which there's much more things going on, there could be equally potential potent and -- or it could be translating into the same activity level as the affinity shows. So that's why I want to caution a little bit that the affinity level of our target does not always translate to a higher activity of the drug in the body. But technically, the affinity of 3-71 to the sigma-1 receptor is stronger than the affinity to sigma-1 of ANAVEX 2-73.

Okay. And the last question about the positioning of the 3-71. Just first, can you elaborate why is it particularly suited for FTD? And also you have 2-73 in trial for Parkinson and Alzheimer. So how do you position 3-71 regarding those 2 patients as compared to 2-73?

Right. Excellent question. So ANAVEX 3-71 was extremely profound in removing Tau pathology, and frontotemporal dementia is considered a clear Tau pathology. But not only that, but also ANAVEX 3-71 has removed Tau pathology. ANAVEX 3-71 has also been very good at removing a vector and reducing inflammation in a triple transgenic animal model. So the triple transgenic animal model generates an animal, which expresses Tau as a pathology of Alzheimer, but also expresses a beta as a pathology of Alzheimer's and also expresses inflammation as a pathology of Alzheimer. So that's what it's called triple transgenic. And in all these 3 features, ANAVEX 3-71 was formidable in reducing the respective pathology. So it was reducing a beta, reducing Tau and reducing inflammation. So extremely important in these 3 pathways. So that is why we have been successfully able to file ANAVEX 3-71 for the pathology of Tau, which FTD is a very prominent indication in rare diseases for. So that is the background of the FTD indication. What we still have to do now is to go into the clinic in patients with different pathologies. And that's why we are starting with this first trial, which is basket-like trial in FTD, in schizophrenia and in Alzheimer. And we could also probably go in other indications as well. We could go into depression possibly. We could go also in rare diseases, like developmental in nature. But right now, we just want to take it step by step, where we believe the drug could be strongest at this point in time. But we will advance probably also in other indications as we go forward.

Congratulations on the progress.

We have a follow-up question from Charles Duncan.

Okay. Super. Regarding FTD and study that you mentioned that you wanted to start, Christopher, regarding the biomarker. Let me ask you if you'll be looking which biomarkers will you be looking at specifically? And I'm sorry if this was asked. But more specifically, will you be using quantitative EEG to evaluate the activities that you mentioned that 3-71 has? It seems like quantitative EEG and evoked potential has some read through for the potential for the drug in other cognitive disorders.

That's exactly right. So we're planning to do a study focusing on EEG ERP, as you mentioned. In the background is the following. We were already successful in using EEG in ANAVEX System 3 Phase IIa and give us confidence of target engagement and activity in the brain. And now the technology has advanced even further to even be more sophisticated. And as you know, we are part of a consortium of the schizophrenia consortium to allow the EEG ERP to be a biomarker of -- respective biomarker of the pathology of schizophrenia. And it will also be used in schizophrenia trials. So we have used it in Alzheimer. It's been used in schizophrenia trials, and we also believe it can be beneficial in FTD patients for that reason. So this will be a key biomarker of the study, and it could be also a surrogate biomarker because that's what the consortium we are part of is currently exploring in -- of schizophrenia. And in addition to that, the study will be loaded with blood biomarkers as well as CSF biomarkers. And I'd like to add to a comment on a few which are part of this but these are standard biomarkers of pathology of the CNS, like neuropilin grain and other known biomarkers of degeneration. Ed, do you have a few additional comments to that, please?

Yes, yes. So in addition to those biomarkers that you mentioned, we would like to look at the neurofilament light chain, NFL. We also look at plasma and serum -- or serum concentration of glutamate and other related amino acids. We're looking at TDP 43, GRP 78, concentrations of CHOP as well. So quite a comprehensive biomarker strategy and that will be able to demonstrate the effect of 3-71 on these pathologies in order to give confidence going into further development.

That's helpful. I appreciate the added color. Sorry if I missed this -- in a previous answer, but when would you anticipate increased visibility on the 3-71 program in terms of any clinical observations.

We are planning to start the study as soon as we can. And we believe that the study cohorts will consist of FTD, schizophrenia and Alzheimer. We'll probably provide the first data in schizophrenia because those studies are usually not longer than several days or a week. And that's the advantage of the schizophrenia studies. And the FTD and the Alzheimer will be more longer studies. We're talking about 6 months because you just need more time to be able to show -- demonstrate that difference. But we will have earlier biomarker measures throughout the duration of that period of time and maybe there is a separation already showing up earlier. But this is right now the direction of the timing.

So perhaps even in the second half of this year, we could see some early cohort data?

Exactly. If we are able to start the study on a timely basis, that's exactly what we're planning to have. Thank you. So we have an additional question. That is from -- Clint, could you mind -- do you mind repeating the question, please?

Sure. From Muzamil Saleem at H.C. Wainwright for Ram. He asked how closely do the Phase I data track with the ANAVEX 2-73? Are they any improvements in safety, tolerability and PK?

Right. So the answer that is right now, it looks like that ANAVEX 3-71 has more advanced data in the clinic. We have much more background and broadness of activity indication spectrum from Rett syndrome to Parkinson, to Parkinson, dementia to Alzheimer's disease. We don't have that yet with ANAVEX 3-71. But in terms of comparing just the Phase 1 that we see in ANAVEX 3-71, a very broad therapeutic window ranging from 5-milligram per day to probably up to 160 milligrams per day and that is broader than ANAVEX 2-73 where we dosed from the low dose up to 60 milligrams per day in a Phase I. Second question, please.

Yes. Are you able to make any inferences on the potential efficacy and benchmarking against ANAVEX 2-73 in terms of the maximum tolerated dose?

Yes, I think we can. So it looks like the doses of ANAVEX 3-71 can be increased further. If you look at a few numbers that we see that we can dose up to 200 milligrams per day in ANAVEX 3-71, but it doesn't take away the effect of ANAVEX 2-73 only because you can dose higher, it doesn't mean that the drug is better. So that is the background on that. But that's a factual fact that ANAVEX 3-71 is very well tolerated. Next question, please.

Right. The third one, in terms of advancing ANAVEX 3-71 into biomarker-driven clinical development dementia program for the treatment of FTD, schizophrenia and Alzheimer's disease. Can you provide specific details in terms of whether the focus should study -- the focus of this study will center around neuro imaging or blood-based biomarkers?

Yes, I think we just answered the question. So the focus of this study will be on eGRP, which is neuroimaging, but we will add a significant portion of the trial of blood biomarkers -- blood-based biomarkers, which we just elaborated on. And again, more details will emerge very soon when we share the design of this study.

Okay. I believe that, that finishes up the questions.

Great. Then we'll do the last remark. So again, I really appreciate everybody's attending today and stay tuned. We'll continue to provide data and data readout is imminent. And again, as we look ahead, we will continue to focus on driving meaningful growth across our broad sigma-1 platform portfolio to deliver transformational treatments for patients with all degenerative and developmental neurologic disorders around the world. We look forward to providing further updates and advancements as they continue. And I'd like to provide you information. If you have additional questions, please go on our website at www.anavex.com. Thank you very much and talk to you soon. Goodbye.

Thank you, ladies and gentlemen. This concludes today's conference call. We thank you for participating.